BLOG Medicine

Maine's Dirigo Health Savings One-Third of Original Estimate

Maine's Acting Insurance Superintendent, Eric Cioppa, ruled last Monday (17 September) that the Dirigo Health Program saved the health care system $32.8 million in its third year of operation; roughly only one-third of the original $92.7 million savings estimate released on 8 July 2007.

Despite Karynlee Harrington, executive director of the Dirigo Health Agency, previously stating in the Portland Press Herald that the agency had refined the methodology used to determine the savings amount based on past decisions of the superintendent, it appears the agency needs a new mathmagician in accounting.

On 27 July, the Dirigo Health Board of Director had reduced the estimated $92.7 million to $78.1 million.  The September 17 ruling of $32.8 million is the lowest savings figure, to date, in the agency's short, but beleaguered history; a possible indication that the agency has lost its steam.  Last year's savings were $34.2 million and the first year savings were ruled to be $43.7 million.

Of the $32.8 million, Cioppa found that the program provided $25 million in hospital savings, $6.3 million in uninsured and under-insured initiatives, and $1.5 million in provider fee savings.  The savings form the basis of the Savings Offset Payment (SOP), the sole funding mechanism for the program.

At a Dirigo Board meeting held after Cioppa's ruling, members discussed the possibility that the decrease in funding may result in the elimination of the subsidies currently paid to a majority of DirigoChoice program participants.

The Maine Dirigo Health program was established in 2003.  Dirigo stopped accepting new enrollees July 1, 2007.■

Dirigo Health: Con Artists, Liars, and Thieves?

With no new enrollment as of July 1 and stated savings estimates and membership numbers gyrating up and down faster than a turkey trot, one has to wonder if Maine's Dirigo Health is made up of con artists, liars, and thieves or if they actually believe their mathmagical accounting.

On 8 July 2007, Dirigo Health released a 2006 estimated savings amount of $92.7 million.  By Friday, 27 July Maine's Dirigo Health Board of Directors had reduced the amount they claim the Dirigo Health program has saved the state's healthcare system in 2006 to $78 million, still more than twice the amount determined in 2005 that required a ruling by the State Supreme Court to be settled.  The recently reduced $78 million figure will now be submitted to the state superintendent of insurance, who has historically reached a lower number than the board, for final determination.

Karynlee Harrington, executive director of the Dirigo Health Agency, was quoted in the Portland Press Herald stating that the agency has refined the methodology used to determine the savings amount based on past decisions of the superintendent seemingly oblivious as to why it should be objectionable that Dirigo's accounting methodologies are changeable, year-to-year and seem to conveniently eliminate Dirigo's earlier cost concerns.  However, not only do Dirigo's accounting methodologies change based on the needs of the day, but the membership numbers experience dramatic unexplained leaps, as well.

On 1 July 2007, when Dirigo stopped accepting new enrollees stating cost concerns, they quoted membership of 14,400, many of whom already had insurance and less than half of the 31,000 Dirigo said they would cover in 2003 and nowhere near the 130,000 Dirigo forecast for coverage by 2009.  By 28 July 2007, only 27-days after halting enrollment, Dirigo mathmagically claims 26,000 Maine residents have been helped.

For their part, as expected, Maine insurance carriers plan to dispute the board's figures, adding that it's a conflict of interest for the Dirigo board to make a determination on savings that will translate into income for its program.

Dirigo's annual attempt to be more than just another failed attempt at healthcare reform with lingering delusions of grandeur is similar, in its own way, to the frivolousness, fantasy, and mathmagical fiction that might be found in a Harry Potter book -- too bad, unlike JK Rowling, Dirigo doesn't know when to end the fairy tale.■ 

Mass Governor Asks Blue Cross to Keep Higher Employer Contribution

At the request of Governor Deval L. Patrick (D-MA), the state's largest health insurer, Blue Cross and Blue Shield of Massachusetts, scrapped a new policy that would have allowed owners of small businesses to contribute just one-third of the cost of their employees' health plan premiums.  Blue Cross is the state's largest health insurer with about 3 million members.

Prior to 1 July, Blue Cross required a minimum 50 percent contribution to premiums from employers with 50 or fewer workers.  The average contribution by Massachusetts employers is about 75 percent.

On 1 July, Massachusetts's healthcare reform law took effect, under which, if a company does not offer health insurance, low income works can receive subsidized coverage under the state's Commonwealth Care plan.  They are ineligible for assistance, however, if their employer offers a company health plan, regardless of the company's contribution to premiums.

Company's not offering health insurance to their employees or contributing less than what the state deems "fair and reasonable" toward their employees' health plan premiums are required to pay an annual fee of $295 per employee.

Harvard Pilgrim Health Care, the state's second largest health insurer with about 1 million members, has said that the insurer will retain its 50 percent contribution after earlier reviewing its policies as a result of Blue Cross's lowering its minimum contribution to 33 percent.■

One Nation, Uninsured

Six times in the past century -- during World War I, during the Depression, during the Truman and Johnson administrations, in the Senate in the 70s, and during the Clinton administration -- efforts have been made to introduce some kind of universal health insurance, only to be rejected.  Each time, Americans have instead opted for a system of increasing complexity and dysfunction.

The above quote, found in Friday's BLOG Medicine, begs the question:  Why?

A good place to start when looking for an answer can be found in Jill Quadagno's, One Nation, Uninsured: Why the U.S. Has No National Health Insurance.  Quadagno is a sociology professor at Florida State University, where she holds the Mildred and Claude Pepper Eminent Scholar Chair in Social Gerontology.  One Nation, Uninsured shows how powerful stakeholders like the American Medical Association (AMA), the American Federation of Labor (AFL), and the Health Insurance Association of America (HIAA), at various times over the last 60 years, have acted to keep health care financing out of the government's hands, effectively preventing every attempt to enact national health insurance.

In light of Michael Moore's recent shockumentary Sicko, a quote from Jonathan Cohn's review in the Washington Post of Quadagno's book is especially relevant (and prescient -- the review was done in 2005):

Quadagno's ultimate message seems to be that politics are more important than policy -- that progressives won't achieve universal coverage unless they learn to operate like the special interests of the right. She's probably correct -- which is why her richly constructed history could prove so handy in the months and years to come.

Given the breadth and depth of the various coalitions that have formed to promote change, we have reason to be optimistic that we are, indeed, at a tipping point for healthcare reform.■

Maine's Dirigo Health Makes More Inflated Claims

Within days of citing cost concerns and putting a hold on new enrollees, Maine's Dirigo Health now predicts it will save the state's healthcare system $92.7 million in its third year of operation.

On 1 July, Dirigo Health stopped taking new members, stating the need to cut costs.  Small businesses and self-employed people were given an additional 60-days, cutting off enrollment on 1 September.  Dirigo recently won its court case over the much-contested savings offset payment (SOP) funding mechanism, securing $34.4 million from insurance companies, but Governor John Baldacci (D-ME) cut the requested additional $16.3 million from the state's current budget, causing Dirigo executives to claim they could only remain operational through the fiscal year beginning 1 July.

The savings calculation is the starting point from which the SOP is determined.  The payment is an assessment made on insurers based on savings created by Dirigo through its enrollment of members -- currently only 14,400 Mainers and no where near Dirigo's first-year enrollment target of 31,000 uninsured, let alone 130,000 by 2009.  Insurers argue that the majority of Dirigo members previously had insurance and that the plan is not meeting its legislated goal of reducing the number of Maine's uninsured.

A hearing before the Dirigo Health board of directors, scheduled for 23 July, is the next step in determining the SOP.

Last year, Dirigo calculated that the plan resulted in close to $100 million in savings.  The Dirigo board reduced that figure to $41.8 million and the insurance superintendent reduced it to $34.3 million.

BLOG Medicine volunteers to check Dirigo's math, because these numbers continue not to add up.  When Dirigo claimed the $100 million savings the plan had approximately 7,000 members.  Now, with 14,400 members and crying poverty, Dirigo claims another, seemingly miraculous, $93 million in savings, that, just in the nick of time, would allow the plan to keep its doors open after next year.  If these savings numbers are even remotely accurate, Dirigo membership must only consist of high-cost catastrophic cases.

If, instead, Dirigo's paltry membership is more broadly based (i.e., the risk pool consists primarily of young, healthy members), then the SOP calculation starting point cannot feasibly be accurate.  However, if Dirigo membership does, in fact, consist primarily of the elderly and severely ill, then Maine legislators have further compounded their financial malfeasance by allowing Dirigo to self-insure, as signed into law by Baldacci in May 2007.

Regardless, on 1 July 2007, 4 years into the experiment of state-sponsored health insurance, Dirigo Health proved it was neither self-sufficient nor financially sound by closing enrollment.  The State of Maine has proved, beyond any reasonable doubt, that it does not belong in the health insurance business.  No inflated claims of unrealistic, unsubstantiated savings should cloud anyone's perception --this emperor has no clothes.■

Health Care Top Campaign Issue

Robin Toner's article in today's New York Times reiterates the importance of the health care issue in the 2008 Presidential Election.

In case anyone had forgotten, according to the Kaiser Family Foundation, premiums for family coverage have increased some 87 percent since 2000 and the number of Americans without health insurance has grown from 37 million when the Clinton Administration first confronted health care costs to 45 million, according to recent Census Bureau estimates.

Unfortunately it does appear that the issue is being treated to partisan politics with Democrats tending to side along the lines of government-mandated care and Republicans shooting for free-market solutions, but at least both parties seem to agree that this issue won't tolerate being ignored.■

National Health Insurance Is Not National Health Care

I came across Amy Ridenour's National Center Blog where she references an excellent Washington Post commentary by David Hogberg reiterating the difference between national health care and national health insurance.

In a non-confrontational manner, Hogberg clearly points out the error in promoting misunderstanding by a misuse of non-synonymous terminology by individuals who aren't a part of the health care community dealing with the vernacular and issues on a daily basis.■

Maine's Dirigo Health Puts Hold on New Enrollees

Saying they need to cut costs, the Maine state-sponsored insurance program, Dirigo Health, stopped taking new members as of today.  Small businesses and self-employed people have until 1 September.

After 4 years, the program, created in 2003, has 14,400 members, less than half of the 30,000 members they were to have covered in the first year.

The program is claiming that without an additional $16.3 million that was requested and rejected in the last budget, the $34.4 million that insurance companies pay into the program will only keep them operational through the coming fiscal year.

Perhaps rather than continuing to drag out this failed experiment or foolishly move forward into self-insurance, the Baldacci Administration will recognize that they don't belong in the insurance business and instead work to make appropriate reforms that modify the restrictions on managed care that chased the majority of payors out of Maine in the first place.■

Michael Moore Being Given Too Much Credit?

When Michael Moore's latest documentary, Sicko, begins general release tomorrow I intend to be in the audience.  I want to see what new ground Moore covers on the broken U.S. health care system that hospital administrators, healthcare workers, managed care executives, politicians, numerous policy wonks and patients haven't been able to already discern.

I've not read any of the many reviews that are available -- I don't want to spoil the ending.  I'm looking forward to being shown something shockingly new, amazing, and disturbing like managed care executives receiving multi-million dollar salaries while premiums increase by 10-15 percent each year, or hospitals trying to provide new, potentially life-saving procedures only to be told they're not medically necessary, or physician practices struggling to see patients because reimbursement has stayed below the cost-of-living for the last 5 years, or patients declaring bankrupticy because they can't afford to pay for care received after some catastrophic event -- oh, wait, we've seen that.

Ok, then I'll settle for being shocked and amazed by a documentary that brings continued attention and scrutiny to healthcare reform efforts that actually yields positive action and isn't just a self-promoting, unnecessarily provocative sideshow act regurgitating issues with which we are all too familiar and have already been actively engaged in correcting -- but I won't hold my breath.■

Hospital Administrator Pushed to Suicide by NHS Reforms

The Telegraph is reporting that a hospital manager jumped 100 feet to her death, driven to suicide by the stress of reforms in Britain's National Health Service (NHS).

This is a truly sad story about a troubled young woman who was unable to receive the help she needed in time.■